Crackdown on tobacco puffs up Hungary’s black market for cigarettes

In a parking lot in Nyiregyhaza, a Hungarian town near the Ukrainian border, Imre describes his black-market cigarette operation, whose business is booming thanks to a controversial government tobacco crackdown.

“We sell several hundred cartons per day,” says the young man, who is using a fake name. His colleague “Janos” explains how the contraband merchandise crosses the Tisza river in small rafts.

“We don’t even have to climb onboard … we just pull the rafts from one shore to the other with ropes,” he tells AFP.

“When they reach us, we sort them out and the cigarettes are sent to the four corners of the country.”

Business has never been so good, he adds.

In July, the Hungarian government shut almost 90 percent of the country’s licensed cigarette vendors, squeezing the number to 5,300 from a previous 42,000.

The authorities said their crackdown was an effort to stop sales to minors and reduce smoking in the country of 10 million people, where about 46 percent of men and 34 percent of women light up.

But critics say it is a ploy to favor close allies of Prime Minister Viktor Orban’s government with lucrative tobacco concessions.

Nora Ritok, head of the charity group Igazgyongy in northeastern Hungary, said she doubted the truth of official estimates that the number of smokers in Hungary has dropped by at least 200,000 in one year.

“Almost everyone smokes here,” she said.

“Before, you could buy cigarettes everywhere, in every shop, in pubs. Now it’s banned and there are many smaller villages where you won’t find an (official) cigarette shop … That’s why the black market is developing.”

How much the black market has grown is unclear. But cigarette seizures increased to 85 million in the first 10 months of 2013, compared to 68 million for all of 2012, according to the tax and customs authority (NAV).

Smoking has been banned in public places in Hungary since 2009, but some see a more noticeable change in attitudes thanks to the government’s newest efforts.

“I think there are a lot of people who are now smoking less,” Janos Murci, a lung specialist and president of an anti-smoking association, recently told the weekly Kiskegyed.

“That’s because the price of cigarettes has gone up — in two years, they’ve gone from 600 forints (two euros, $2.75) per pack to 1,000 forints — but also because of the tobacco reform, as there are towns where there are absolutely no cigarettes for sale.”

The government’s tobacco policy has sometimes chalked up ironic successes. Some opponents of Orban’s government refuse to patronize the so-called “national cigarette shops” because of their alleged ties to the ruling centre-right Fidesz party.

“I’ve been smoking since I was 16 and I tried quitting already several times but to no avail,” said Marianna Nemet, a 67-year-old retiree from Budapest.

“Now I think I’ve found the necessary incentive to do it: I will not spend one cent in these national shops, these moneymakers for friends of the party,” she told AFP.

An unintended effect of the law has been a significant drop in tax revenues from cigarette sales, down to 24 million forints in August, compared to 36 million forints a year earlier, according to the tax authority.

Still, the government wants to press ahead with its measures, with new restrictions planned on e-cigarettes as well as tobacco and papers for hand-rolled cigarettes.

The campaign has already paid off, at least for Orban: in October, the World Health Organization (WHO) awarded him a certificate of special recognition for his efforts to clamp down on smoking.

This was a rare international tribute for a man often criticized abroad for his tightening grip on power.